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SolarWorld wins another round in solar panel trade dispute with China

SolarWorld solar panels

SolarWorld, which makes its solar panels in Germany and Hillsboro, celebrated Tuesday when the U.S. government slapped hefty new duties on Chinese solar panels. SolarWorld argues widespread Chinese subsidies to its solar industry are unfair.
(Krisztian Bocsi / Bloomberg News)

SolarWorld's winning streak in its trade dispute with the Chinese continued Tuesday when the U.S. Department of Commerce assigned new duties on Chinese solar panels as high as 35.21 percent.

The department preliminarily ruled the Chinese government is subsidizing certain crystalline silicon photovoltaic products at a rate ranging from 18.56 percent to 35.21 percent. That's significantly higher than in Solar World's first case, when U.S. trade officials ruled in Solar World's favor but assigned anti-subsidy-related duties in the range of 2 and 4.79 percent.

"Today is a strong win for the U.S. solar industry," said Mukesh Dulani, president of SolarWorld Industries America Inc., based in Hillsboro. "We look forward to the end of illegal Chinese government intervention in the U.S. solar market, and we applaud Commerce for its work that supports fair trade."

As the bitter dispute winds through the federal trade bureaucracy, relations between the U.S. and China continue to deteriorate. Last month, a federal grand jury indicted five members of the Chinese military accusing them of cyber-espionage. The suspects allegedly hacked into Solar World's Hillsboro computers and stole the company's financial data, technical secrets, even a document laying out its strategy in the ongoing trade dispute.

The commerce department noted the Chinese government "failed to respond completely to certain questions."

Since May 14, commerce has initiated one other investigation of allegedly improper Chinese subsidies and has ruled against the Chinese in two other ongoing trade disputes unrelated to solar panels.

The so-called "countervailing duties" preliminarily approved Tuesday are intended to neutralize the advantages offered by government subsidies. They are typically imposed after an investigation determines a foreign country's export subsidies are damaging domestic producers.

Tuesday's decision was preliminary. It has yet to rule on allegations that Chinese manufacturers, backed by the Chinese government, dumped their product in the American market. Before the duties become permanent, the International Trade Commission must also find a causal link between the subsidized imports and material injury to the U.S. industry.

SolarWorld, the German owned solar panel maker with its American headquarters and manufacturing base in Hillsboro, launched the trade case with a handful of other domestic manufacturers nearly four years ago. It won the first round. But Chinese manufacturers evaded the resulting duties by farming out a piece of the solar panel manufacturing process to Taiwan companies.